BUSINESS

Chinese Auto Stocks Slump After Fresh Wave of Discounts

Published: May. 27, 2025 7:53 p.m. GMT+8

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Stock prices are the latest casualty in China’s prolong auto price war.

A fresh round of price cuts is roiling China’s fiercely competitive auto sector, dragging down shares of domestic manufacturers and stoking fears that there’s no end in sight for the battle for market share in the world’s largest car market.

The latest discount wave was triggered by BYD Co. Ltd. (002594.SZ), the country’s top electric-vehicle (EV) maker, which slashed prices on 22 models by up to 34% on Friday. Among the steepest reductions was for the Seagull hatchback — now priced at 55,800 yuan ($7,750). That reflects a 20% drop from its original 69,800 yuan price tag, which already made it the brand’s most affordable offering. Meanwhile, the plug-in hybrid Seal sedan saw its price plunge one-third to 102,800 yuan. The promotions will run through June 30.

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BYD slashed prices on 22 models by up to 34%, prompting similar discounts from rivals like Geely, SAIC, and Leapmotor, intensifying China's auto price war.
The discounts triggered sharp stock declines: BYD fell 8.6% in Hong Kong, Geely dropped 9.5%, and Leapmotor 8.5%.
Industry leaders warn that aggressive price cuts risk eroding quality, straining suppliers, and worsening financial pressures amid oversupply and fierce competition.

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Who’s Who

BYD Co. Ltd.: BYD Co. Ltd. (002594.SZ) is China’s top electric vehicle (EV) maker. Recently, it triggered a new wave of price cuts by discounting 22 models—some by up to 34%—including steep reductions for the Seagull hatchback and Seal sedan. The company aims to sell 5.5 million vehicles in 2024 and sold about 1 million units in the first quarter. BYD also pressured its suppliers for a 10% discount to stay competitive.

Geely Automobile Holdings Ltd.: Geely Automobile Holdings Ltd.’s EV brand, Galaxy, followed BYD in rolling out limited-time discounts amid the ongoing price war in China’s auto market. As a result, Geely’s stock suffered a significant decline, dropping 9.5% in Hong Kong trading.

SAIC Motor Corp. Ltd.: SAIC Motor Corp. Ltd. (600104.SH) is mentioned in the article as one of the Chinese automakers responding to BYD’s latest price cuts. Its premium marque, Roewe, has introduced similar limited-time discounts, following BYD’s lead in the wave of price reductions within the highly competitive Chinese auto market.

Guangzhou Automobile Group Co. Ltd.: Guangzhou Automobile Group Co. Ltd. (601238.SH) has responded to BYD’s recent price cuts by offering similar limited-time discounts through its EV brand, Aion. This move is part of a broader trend among Chinese automakers to reduce prices amid intense competition and oversupply in the world’s largest car market.

Zhejiang Leapmotor Technology Co. Ltd.: Zhejiang Leapmotor Technology Co. Ltd. is one of the Chinese automakers participating in the latest round of price cuts in China’s auto market. Following BYD’s lead, Leapmotor introduced similar limited-time discounts on its electric vehicles, aiming to boost sales amid intense competition and oversupply in the world’s largest car market. Leapmotor’s Hong Kong-listed shares fell 8.5% in response to the price war. The company targets at least 500,000 car sales in 2024.

Great Wall Motors Co. Ltd.: Great Wall Motors Co. Ltd. (601633.SH) held its prices steady during the recent wave of discounts but still saw its shares drop. Chairman Wei Jianjun criticized the industry's aggressive price-cutting, warning it could harm product quality, force cost-cutting, squeeze suppliers, and delay payments.

Li Auto: Li Auto is mentioned as one of the EV upstarts whose stock suffered losses following the new round of price cuts led by BYD. Although Li Auto did not reduce its prices, its shares still declined on Monday due to overall market pressures and investor concerns about oversupply and fierce competition in China’s auto sector.

XPeng: XPeng, listed among China's EV upstarts, saw its stock decline on Monday following BYD’s aggressive price cuts, despite not announcing any price reductions itself. The company, along with other automakers, is feeling the impact of eroded investor confidence amid intense market competition and ongoing price wars in China’s auto sector.

Nio: Nio, an EV upstart in China, experienced losses in its stock price on Monday despite not participating in the latest round of price cuts. The company was affected alongside other automakers amid eroding investor confidence driven by industry-wide oversupply and fierce price competition.

Dongfeng Motor Group Co. Ltd.: According to the article, Liu Luochuan, director of a research center under Dongfeng Motor Group Co. Ltd., commented on the ongoing price war in China’s auto industry, questioning how it could end given fierce competition and a limited market. Other than this quote, no further detailed information about Dongfeng Motor Group Co. Ltd. is provided in the article.

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What Happened When

Late November 2024：: A screenshot showing BYD asking its suppliers to give a 10% discount starting from January 2025 went viral; Caixin confirmed the email is authentic.

Starting from January 2025：: BYD asked its suppliers for a hefty 10% discount to cope with increased price competition.

First quarter of 2025：: BYD delivered roughly 1 million vehicles.

Week of May 19–25, 2025：: Great Wall Motor Chairman Wei Jianjun criticized 'reckless' price-slashing in the industry.

Friday, May 23, 2025：: BYD launched a new round of price cuts, slashing prices on 22 models by up to 34%, including significant drops for the Seagull hatchback and Seal sedan; Great Wall Motor Chairman Wei Jianjun criticized the industry’s price-cutting on the same day.

Monday, May 26, 2025：: BYD’s Hong Kong-listed shares fell 8.6%, Shenzhen stock dropped nearly 6%, Geely’s stock fell 9.5%, and Leapmotor’s fell 8.5% in Hong Kong. Other brands, including Great Wall Motors, Li Auto, XPeng, and Nio, experienced stock losses.

AI generated, for reference only